How can you make your charitable deductions count this tax season? The following tips will make it easier to make your donations count when tax season rolls around.
Pay Attention to the Calendar
Contributions are deductible in the year made. Forbes explains that in order to make it count during the tax year, gifts must be made by December 31. That doesn’t necessarily mean cash out of your account. Contributions made by text message are deductible in the year you send the text message if the contribution is charged to your telephone or wireless account. Credit card charges, even if they’re not paid off before the end of the year, are deductible so long as the charge is captured by year end.
According to the IRS’s website, regardless of the amount, to deduct a contribution of cash, check, or other monetary gift, you must maintain a bank record, payroll deduction records or a written communication from the organization containing the name of the organization, the date of the contribution and amount of the contribution. For text message donations, a telephone bill will meet the record-keeping requirement if it shows the name of the receiving organization, the date of the contribution, and the amount given.
Only donations to qualified charitable organizations are deductible. If you are not sure whether an organization is qualified, ask to see their letter from the Internal Revenue Service (IRS). Many organizations will actually post their letters on their website. If that isn’t possible, you can search online using IRS Exempt Organizations Select Check.
Don’t Forget Payroll Deductions
Your employer may participate in a charitable giving program which allows you to make contributions directly from your paycheck. According to Forbes, if you make a contribution by payroll deduction, you are required to retain a pay stub, form W-2 or other document furnished by your employer that shows the total amount withheld as a charitable donation along with the pledge card that shows the name of the charity.
The above tips will help you prepare for the season!